U.S. Consumers Sticking to the Basics

U.S. Consumers Sticking to the Basics

Consumers are sticking with basic purchases in categories like fresh meat, pasta, packaged dinners along with baking mixes and supplies as meal preparation consumption comes back to the home.

Increases in wine and alcoholic beverages indicate that consumers are opting to consume their favorite beverage at home too. At the same time they are continuing to avoid discretionary items, according to the latest monthly update of U.S. Retailing & Consumer Trends from The Nielsen Company.

The non-edible departments were the greatest contributors to an overall 1.2 percent unit sales decline at food, drug and mass-merchandisers, during the 52-week period ending July 11. General merchandise categories suffered most with a decline of 7.9 percent. Non-foods dropped by 3.8 percent and health and beauty aides by 3.5 percent.

Canning and freezing supplies saw the greatest unit sales increases at 18.1 percent followed by seasonal merchandise (8.3 percent), fresh meat (6.2 percent), wine (5.6 percent) and dry mix prepared foods (5.2 percent).

There was also a 3.7 percent unit sales increase in vitamins, a category that typically does well during times of recession as consumers focus on maintaining their own health.

“By and large the categories that are growing the fastest are those related primarily to meal consumption-a notion of back-to-basics,” says Todd Hale, SVP, Consumer and Shopper Insights at Nielsen. “It’s also interesting that the No. 1 item on the list is canning supplies. There’s been resurgence in consumers growing their own fruit and vegetables and canning them.”

Across all departments, dollar sales over the latest 52-weeks experienced a 2.7 percent increase, which was mainly seen in edible department. Fresh meat had the largest increase at 9.7 percent followed by packaged meat (6 percent), dry grocery (5 percent) and alcoholic beverages (4.6 percent). Discretionary departments and the dairy department, which has experienced significant price reductions as a result of falling commodity prices, ranked in at the bottom of the dollar growth scale. Non-foods (3.1 percent) and health and beauty aides (0.1 percent) showed little growth. Dairy (-1 percent) and general merchandise (-5.0) were the only departments reflecting loss.

“As prices for many commodities have dropped this year, retailers are slashing prices broadly to lure shoppers who are very focused on value and low prices,” said Hale. “As their competitors follow suit with price cuts, we are already seeing a number of retailers struggle to maintain positive same-store-sales growth.”

While food staples were also prevalent in the top-15 dollar growth categories, seasonal merchandise and canning and freezing supplies saw the largest increases with 34 percent and 27 percent growth respectively. Dry vegetables and grains, flour, and pasta, all with gains of 18 percent or more, rounded out the top five.

Moving forward, “we’re going to continue to see consumer restraint in terms of where they shop and how they buy,” said Hale. “Food and beverage categories will continue to do reasonably well. Those manufacturers selling discretionary categories are going to have to work very hard to give consumers a reason as to why they should be buying now.”